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Microcap & Penny Stocks : Green Oasis Environmental, Inc. (GRNO) -- Ignore unavailable to you. Want to Upgrade?

To: Charles A. King who wrote (9811)	8/31/1998 12:40:00 PM
From: Norman H. Hostetler	Read Replies (1) \| Respond to of 13091

Charles, many thanks for taking the time to summarize these filings. I'm sure we all wish that some things had been handled or expressed differently, including the Bo O'Brien connection with RecOil. Another major instance concerns the characterization of letters of intent as sales. Anyone with any knowledge of accounting knows that there are lots of different answers to the question of when a "sale" actually occurs--many software companies are now having to restate earnings because of the accounting board changes which, in part, alter the point in the sequence of events that permit the company to record a "sale" (for example, product shipped to resellers which includes return privileges for product unsold by resellers cannot now be called a "sale" when shipped to the resellers, but only when sold by resellers, and therefore unable to be returned--companies were inflating quarterly revenue figures by making massive shipments under such terms shortly before the end of an accounting period [if this is "fraud," the SEC took little notice of it]). Bill certainly believed that a letter of intent was a sale because it specified the conditions (including price) for the purchase of equipment. But since there was usually no deposit, and no cost to the purchaser for cancellation or failure to perform, it would seem to me that calling these letters "sales" would in fact be misinterpreted by most people (including me). The more accurate "letters of intent to purchase processers in the amount of $25.5 million" would have been both legally accurate and much clearer. It did and does bother me that Bill, whose primary educational focus was accounting, was not more sensitive to these potential problems. Nevertheless, it seems to me that the primary blame falls on the purported experts in these matters, Bo O'Brien and Jon Andersen (note spelling, Ron Reece; I take it from the lawsuit against Gambrell & Stoltz), who significantly failed their due diligence responsibility to save GRNO from harm. For example, even I knew that "forward-looking" press releases should have some sort of "safe harbor" statement in them, as all such GRNO releases have since contained. It is inconceivable to me that professionals in writing and reviewing such press releases would not include such statements as a matter of course. =+=+=Norm